First Free Story (1 of 3)Join Skift Pro
The lawsuit, filed by Kayak shareholder Michael James Krawczynski on November 16 in Delaware Chancery Court, alleges that the $40 per share cash and stock offer from Priceline short-changed Kayak investors, especially since Kayak executed its IPO just four months ago, Law360 reports [subscription required].
The lawsuit, which also names Priceline as a defendant, “claims that besides accepting an inadequate offer at an unexpected time, the board compounded their breach of duty by signing off on deal-protection devices designed to dissuade potential competitors from bidding on the company,” according to the Law360 story.
The litigation, which seeks class-action status, asks that the deal be blocked until the Kayak board carries out its fiduciary duty to ensure that Kayak shareholders receive the highest possible value for their investments, Law360 states.
It is doubtful that such a shareholder lawsuit would actually delay the pending deal, but it likely would be a matter for Priceline to deal with at a later date.
Representatives of Kayak and Priceline declined to comment about the suit.